“We believe that blockchain technology holds great promise in allowing capital markets to operate more efficiently while simultaneously providing greater transparency and security, all of which are fundamental to the public interest.” tweet
Robert Greifeld, Chief Executive, Nasdaq
In October 2008 a developer, or group of developers, using the identity Satoshi Nakamoto, issued a paper detailing a P2P electronic currency, which utilised code to verify and protect transactions. The currency and recorded transaction information would remain anonymous and detached from any governmental authority or institutionalised bank. Their product was called Bitcoin and responded to concerns generated by the global financial crisis, since the currency operated without a third party or middleman (i.e. a bank). Without a central body, all holding and transaction information is shared between every computer using the software, to create a public ledger – the blockchain.
The blockchain retains all transaction information in a succession of connected blocks. Every 10 minutes a new block with records of the latest transactions is added. Thus every Bitcoin transaction is public, and no individual authority can prevent or reverse a transaction. The currency has developed an unflattering reputation, associated with regular hacks, most notoriously Mt Gox, and the criminal underworld, such as the Silk Road. However, recently Bitcoin and the technology behind cryptocurrencies have caught the interest of many in the financial services, and some companies have begun to investigate how this software could revolutionise the future of their field. Can banks adopt the software specifically designed to circumnavigate them? Is commercialization of the blockchain the future of financial technology?
Bitcoin, blockchains and banks
Created to provide a currency, which circumnavigated the need for banks, it seems ironic that financial services are now keen to adopt the software, believing it will help them modernize and disrupt the market. The
Originally appeared at: http://themarketmogul.com/blockchain-technology-cryptocurrencies-financial-services/